Best Vanguard mutual funds of 2024
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Best Vanguard mutual funds of June 2024

Tony Dong

Verified By
Farran Powell
Farran Powell

Farran Powell

Verified by an expert

“Verified by an expert” means that this article has been thoroughly reviewed and evaluated for accuracy.

Verified By
Stephanie Steinberg
Stephanie Steinberg

Stephanie Steinberg

Verified by an expert

“Verified by an expert” means that this article has been thoroughly reviewed and evaluated for accuracy.

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Updated 2:17 p.m. UTC June 4, 2024

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The Vanguard Group is one of the largest global asset management firms today, serving more than 30 million investors around the world.

Within the U.S., Vanguard offers numerous mutual funds along with low expense fees. It’s a testament to its commitment to investor interests.

To pick the best Vanguard mutual funds in 2024, we assessed the current offerings based on stringent criteria. We selected the following funds based on the level of diversification, expense ratio, assets under management (AUM), transaction fees and management style. This helped identify broad funds that are popular with investors and adhere to a passive indexing strategy.

Best Vanguard mutual funds

Vanguard 500 Index Fund Admiral Shares (VFIAX)

Expense ratio

0.04%

Total assets

$1.1 trillion

What you should know

A perennially popular choice for U.S. investors is VFIAX, which serves as the spiritual successor to Vanguard’s first index fund, called First Index Investment Trust.

The fund tracks the S&P 500 index, a benchmark of 500 large-cap U.S. stocks selected to represent the overall domestic stock market’s returns. Thanks to its low cost, strong historical performance and ubiquity, the S&P 500 has become a popular holding for aggressive long-term investors banking on continued U.S. market outperformance.

Pros and cons

Pros
  • Strong historical performance.
  • Tracks a well-known, popular index.
  • A long track record of operations and high AUM.
Cons
  • Limited to U.S. large- and mid-cap stocks.
  • Top-heavy thanks to the index’s market-cap weighting.
  • More than 30% concentration in information technology sector stocks.

More details

  • Category: U.S. large-cap equity blend.
  • Minimum investment: $3,000.
  • 10-year annualized rate as of June 3: 12.92%.

Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX)

Expense ratio

0.04%

Total assets

$1.5 trillion

What you should know

The S&P 500 index may be the benchmark index for U.S. equity market performance in the eyes of many investors, but it does exclude some mid-cap, small-cap and microcap stocks.

To capture the returns of the investable U.S. stock market, our pick of choice is VTSAX, which tracks the Dow Jones U.S. Total Stock Market Index. VTSAX currently holds more than 3,800 stocks, with top holdings in Apple (AAPL), Microsoft (MSFT) and Amazon (AMZN), similar to VFIAX.

Pros and cons

Pros
  • One of the most accurate representations of the total U.S. stock market.
  • Massive AUM and low fees.
  • A strong historical performance similar to VFIAX.
Cons
  • Limited to U.S. stocks with minimal international diversification.
  • The addition of small-cap stocks could also introduce extra volatility.
  • More than 28% is concentrated in technology stocks.

More details

  • Category: U.S. all-cap equity blend.
  • Minimum investment: $3,000.
  • 10-year annualized rate as of June 3: 12.27%.

Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX)

Expense ratio

0.05%

Total assets

$311.7 billion

What you should know

Both VFIAX and VTSAX are 100% equity funds, which have higher expected long-term returns at the cost of greater volatility. Older investors with lower risk tolerance may prefer adding bonds that are generally less volatile and have historically provided portfolios with ballast during some bear markets, crashes and recessions.

A good one-size-fits-all option is VBTLX, which tracks the Spliced Bloomberg U.S. Aggregate Float Adjusted Index. The fund holds government Treasurys and investment-grade corporate bonds of all maturities. It offers a good way to access a portfolio of diversified bonds.

Pros and cons

Pros
  • A low expense ratio.
  • Diversified across issuers.
  • Diversified across maturities.
Cons
  • It could lose value if interest rates rise.
  • Lower expected returns than equities.
  • Lower tax efficiency than equities.

More details

  • Category: U.S. aggregate fixed income.
  • Minimum investment: $3,000.
  • 10-year annualized rate as of June 3: 1.51%.

Vanguard Balanced Index Fund Admiral Shares (VBIAX)

Expense ratio

0.07%

Total assets

$52.8 billion

What you should know

A 60-40 portfolio of stocks and bonds historically performs well as an asset allocation. The stocks drive returns during bull markets, while the bonds reduce volatility and drawdowns during bear markets.

With the exception of years like 1932 and 2022, the 60-40 portfolio has historically offered a good blend of risk and return. A great way to access a 60-40 portfolio is via VBIAX, which is basically VTSAX and VBTLX combined. This fund can help medium-term investors with a moderate risk tolerance keep their portfolios simple.

Pros and cons

Pros
  • Historically good risk-return metrics.
  • A low expense ratio.
  • Hands-off management style.
Cons
  • A lack of international diversification.
  • Can lose value if stocks and bonds fall together.
  • Lower expected returns than 100% equities.

More details

  • Category: U.S. multiasset.
  • Minimum investment: $3,000.
  • 10-year annualized rate as of June 3: 8.11%.

Vanguard Total International Stock Index Fund Admiral Shares (VTIAX)

Expense ratio

0.12%

Total assets

$415.6 billion

What you should know

The previous funds on this list indexed only U.S. stocks and bonds. By diversifying into international markets, investors can hedge against the possibility of the U.S. market stagnating, as it did from 2000 to 2009.

The fund offers an easy way to access more than 8,500 international equities from developed and emerging markets. Buying VTIAX allows investors to access international equities without converting currencies or buying American depositary receipts.

Pros and cons

Pros
  • Strong diversification across international developed and emerging markets.
  • A relatively low expense ratio.
  • A simple and transparent way to access a variety of international stocks.
Cons
  • Historically lower returns compared to U.S. equity funds.
  • Lower tax-efficiency than U.S. equity funds.
  • Higher fees than U.S. equity funds.

More details

  • Category: International all-cap equity blend.
  • Minimum investment: $3,000.
  • 10-year annualized rate as of June 3: 4.45%.

Vanguard Total International Bond Index Fund Admiral Shares (VTABX)

Expense ratio

0.11%

Total assets

$89.6 billion

What you should know

Diversification can be achieved on the bond side, too. By diversifying globally, investors can gain exposure to macroeconomic changes in other countries, which include varying levels of inflation and interest rates.

While U.S. bonds have historically been strong, there is no guarantee that they will continue to move forward. Therefore, an allocation to international bonds from developed and emerging market countries via VTABX could make sense. The fund tracks the Bloomberg Global Aggregate Ex-USD Float Adjusted RIC Capped Index Hedged, which holds over 7,000 foreign government and investment-grade corporate bonds of all maturities, averaging an intermediate duration.

Pros and cons

Pros
  • Diversified internationally.
  • Diversified across issuers.
  • Diversified across maturities.
Cons
  • Can lose value if interest rates rise.
  • Lower expected returns and tax efficiency than equities.
  • Higher expense ratio than U.S. bond funds.

More details

  • Category: International aggregate bond.
  • Minimum investment: $3,000.
  • 10-year annualized rate as of June 3: 2.19%.

Vanguard Total World Stock Index Fund Admiral (VTWAX)

Expense ratio

0.1%

Total assets

$46.1 billion

What you should know

For a true all-in-one, set-it-and-forget-it approach for an equity portfolio, investors can buy VTWAX. This fund holds over 9,500 stocks from U.S., international developed and emerging markets and tracks the Spliced Total World Stock Index variant of the FTSE Global All Cap Index.

VTWAX is about 60% U.S., 30% developed and 10% emerging markets. But this can change as the index’s composition changes with movements in the world stock market. Therefore, VTWAX is one of the best ways to passively capture the average returns of the global market over the long term.

Pros and cons

Pros
  • Extreme diversification across nearly all investable markets.
  • Holds small-, mid- and large-cap stocks from all 11 sectors.
  • A transparent and accessible structure.
Cons
  • Higher fees compared to an equivalent combination of VTSAX and VTIAX.
  • Has historically underperformed a U.S.-only fund.
  • No fixed-income exposure unless paired with another bond fund.

More details

  • Category: Global all-cap equity blend.
  • Minimum investment: $3,000.
  • 10-year annualized rate as of June 3: 8.73%.

Compare the best Vanguard mutual funds

FUNDEXPENSE RATIOTOTAL ASSETSCATEGORY
Vanguard 500 Index Fund Admiral Shares (VFIAX)
0.04%
$1.1 trillion
U.S. large-cap equity blend
Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX)
0.04%
$1.5 trillion
U.S. all-cap equity blend
Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX)
0.05%
$311.7 billion
U.S. aggregate fixed income
Vanguard Balanced Index Fund Admiral Shares (VBIAX)
0.07%
$52.8 billion
U.S. multiasset
Vanguard Total International Stock Index Fund Admiral Shares (VTIAX)
0.12%
$415.6 billion
International all-cap equity blend
Vanguard Total International Bond Index Fund Admiral Shares (VTABX)
0.11%
$89.6 billion
International aggregate bond
Vanguard Total World Stock Index Fund Admiral (VTWAX)
0.10%
$46.1 billion
Global all-cap equity blend

Methodology

Our curated rankings of the top Vanguard mutual funds were created by screening funds for several must-have metrics.

Total assets: Every Vanguard fund on this list has accrued at least $1 billion in AUM for its share class. When it comes to funds, a high AUM is a good sign of investor confidence, an economy of scale and general popularity.

Expense ratios: All Vanguard funds on this list have a net expense ratio of 0.15% or lower. “Cost is important, as an expense ratio comes directly out of the performance that an investor will experience,” Dusina says.

Broad diversification: Equity funds on this list must have exposure across more than one market cap size, most of the 11 market cap sectors and a blended equity style (growth and value). Fixed-income funds must encompass both government and corporate issuers, hold investment-grade (BBB or higher) bonds of all credit qualities and index bonds of all maturities.

Excludes certain fees: No Vanguard mutual fund on this list charges any purchase, redemption or 12b-1, sales load or commission fees.

Passively managed: All Vanguard mutual funds on this list track the returns of an underlying benchmark index and do not actively manage their holdings based on the fund’s manager’s strategy or a quantitative methodology.

An experienced fund analyst selected the funds above, but they may not be right for your portfolio. Before purchasing any of these funds, do plenty of research to ensure they align with your financial goals and risk tolerance.

Why other funds didn’t make the cut

The criteria excludes more costly funds that are either actively managed or niche when it comes to their holdings, such as being restricted to growth stocks, small-cap stocks, sector stocks, dividend stocks, or bonds of a certain maturity.

While these funds have their uses, investors looking for the best one-size-fits-all Vanguard fund might find them too narrow in scope for their investment objectives.

“Actively managed vehicles at Vanguard will generally charge a higher expense ratio, as greater expertise and time is required for research,” says Daniel Dusina, director of investments at Blue Chip Partners.

This exclusion decision stems from the results of the 2022 SPIVA Scorecard from S&P Dow Jones Indices, which compares the historical performance of actively managed funds with their passive index counterparts.

The latest SPIVA results show that 92.19% of all large-cap U.S. equity funds underperformed the S&P 500 index over 15 years ending June 30, with similar results for other equity styles and market caps.

Our rankings also excluded equity funds that do not have a broad focus in terms of sector, style and market cap representation. For example, funds that track equities solely from the financial sector were excluded.

Vanguard’s dividend, growth and value-focused funds were also omitted. Funds that target only a specific market-cap segment like small-cap or mid-cap equities were left out, too. For bonds, we excluded funds that hold only specific issuers like government or corporate bonds and those that track only specific maturities like short-duration bonds.

It’s important to acknowledge funds that didn’t make the cut are not inferior or undeserving of investment.

More niche funds like those excluded can be useful to investors with different investment objectives, such as tax efficiency, aggressive growth, steady income or preservation of capital. They also can be used to express a particular investment thesis on a sector, market cap or style or to hedge against certain macroeconomic changes.

This ranking intentionally focuses on broad-based Vanguard funds that are suitable holdings for a range of investors over a long time horizon.

The selected funds all feature broad diversification across sectors, geographies, market caps, issuers and maturities, making them excellent core building blocks for most investment portfolios.

Paul Peeler, financial advisor at Integrated Financial Group, agrees. “No matter the sophistication level of an investor, it’s hard to go wrong with just four Vanguard funds as a core for a portfolio,” he says. “VTSAX, VTIAX, VBTLX and VTABX, used in the proper proportions, can provide the maximum diversification that most investors will ever need.”

Final verdict

Vanguard mutual funds are an excellent way to construct a do-it-yourself investment portfolio. By keeping fees low and holdings broad, Vanguard funds help investors keep more money in their pockets while earning the market’s average return over the long term. The seven picks we selected can be combined in various proportions to create a low-cost, globally diversified investment portfolio of stocks and bonds across most geographies, market sectors, market cap sizes, bond issuers and bond maturities.

Our pick for the best Vanguard mutual fund is VTWAX. This fund features diversification among more than 9,500 large-, mid- and small-cap stocks from U.S., international developed and emerging markets.

For a 0.1% expense ratio, investors can ensure they receive the average return of the world’s stock market in a single ticker. The fund is a high-diversified, low-cost and transparent option for the equity allocation in a portfolio.

Frequently asked questions (FAQs)

You can choose from more than 200 Vanguard funds that are focused in the following areas: money markets, bonds, balanced funds, stock funds, international and specific sectors. However, keep in mind that some of these are institutional class funds and may not be accessible to retail investors.

Investors who prefer to automate their investments via a set-it-and-forget-it approach might prefer mutual funds because contributions can be made easily in any amount. Those who prefer to trade actively and don’t mind seeing their investment fluctuate throughout the day may prefer the liquidity of an ETF.

Younger investors with a high risk tolerance and a long time horizon might prefer a heavier allocation to Vanguard equity mutual funds such as VFIAX, VTSAX or VTWAX. These funds hold 100% equities and generally have higher expected long-term returns. But keep in mind that they are more volatile than bonds and can lose significant value during market corrections.

Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.

Blueprint has an advertiser disclosure policy. The opinions, analyses, reviews or recommendations expressed in this article are those of the Blueprint editorial staff alone. Blueprint adheres to strict editorial integrity standards. The information is accurate as of the publish date, but always check the provider’s website for the most current information.

Tony Dong

BLUEPRINT

Tony Dong is a freelance financial writer with bylines in U.S. News and World Report, the NYSE, the Nasdaq, The Motley Fool and Benzinga. He lives in Vancouver, Canada and is an avid watch collector.

Farran Powell

BLUEPRINT

Farran Powell is the lead editor of investing at USA TODAY Blueprint. She was previously the assistant managing editor of investing at U.S. News and World Report. Her work has appeared in numerous publications including TheStreet, Mansion Global, CNN, CNN Money, DNAInfo, Yahoo! Finance, MSN Money and the New York Daily News. She holds a BSc from the London School of Economics and an MA from the University of Texas at Austin. You can follow her on Twitter at @farranpowell.

Stephanie Steinberg

BLUEPRINT

Stephanie Steinberg has been a journalist for over a decade. She has served as a health and money editor at U.S. News and World Report, covering personal finance, financial advisors, credit cards, retirement, investing, health and wellness and more. She founded The Detroit Writing Room and New York Writing Room to offer writing coaching and workshops for entrepreneurs, professionals and writers of all experience levels. Her work has been published in The New York Times, USA TODAY, Boston Globe, CNN.com, Huffington Post, and Detroit publications.

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